Hey guys, so I’m 15 right now, and I want to gain more knowledge on these types of things so when I’m older I have a basic understanding of this. It may sound very stupid asking this question, but what is insurance? Like I know it helps you with life and gives you money and stuff like that but I am 99 percent confused on what all of it is. I don’t know what car insurance is, life insurance health insurance or any insurance. Do you have to pay for insurance? Do you need it?
Posted by Party_Persimmon4635
2 Comments
Basically, insurance says
“If X happens, we will pay $Y”
That’s really all it boils down to lol
Life insurance?
“If you die during the policy period, we will pay your family (dollar amount)”
Car insurance?
“If you cause an accident, we will defend you up to (dollar amount)”
Home insurance?
“If your house burns down or is broken into, we will pay (dollar amount)
You pay the company a monthly fee in exchange for that agreement. Some people will never file a claim in their life. Other people will have their house burn down on day one of the policy. You never know which side you will be on
what you *do* know is that if your house burned down, you don’t have enough money in your bank account to rebuild it. that’s why you insure your house.
for life insurance, you may have a spouse, two kids, and a mortgage and they depend on your paycheck to afford it. if you die, your spouse can use the payout to pay off the house and help with the cost of raising your children
for car insurance, if you accidentally hit a pedestrian and broke their leg, you probably don’t have the money to pay for their medical bills. insurance will step in and pay the pedestrian for you
basically, you’re paying a company to handle something for you that you can’t afford on your own
Thank you!